Properly pricing the damage done by emissions raises the cost of energy consumption, squeezing demand and incentivizing alternative supplies. It also creates markets for capital investments in clean energy. But researchers Danny Cullenward and David G. Victor show that the reality is different. ( Making Climate Policy Work).. few carbon-trading systems have been put into effect. In Australia and Canada, carbon markets have been rolled back. Where trading in carbon permits continues, more often than not, it is perfunctory and marred by exemptions and giveaways of free polluting permission. The result is not true market discipline but, as Cullenward and Victor call it, “Potemkin markets.” The only major system of carbon currently in operation is that of the EU. Brussels is now proposing the introduction of a carbon border adjustment mechanism to be phased in between 2023 and 2025. The pressure of carbon pricing will continue, but European industry will be shielded against foreign competition.
The question is whether such tactics will work with the United States. The Biden administration does not like having its arm twisted, especially when it comes to carbon pricing.
Present at the Creation of a Climate Alliance—or Climate Conflict
The United States and Europe are on the brink of decisions that could save the planet—or tear apart the West. https://foreignpolicy.com/2021/08/06/climate-conflict-europe-us-green-trade-war/